Molycorp shares drop 9 percent after Seeking Alpha blog post

July 2 (Reuters) - Shares of rare earth miner Molycorp Inc
dropped nearly 9 percent on Wednesday after commentary
website Seeking Alpha posted a blog post by an investor who said
he has shorted the stock.

A writer identified as "New York Shock Exchange" said
Molycorp is worth only $1.60 a share. The company's shares fell
23 cents to $2.34.

The stock has been weighed down by concerns about how
quickly it is burning through its cash, and the possibility it
may need to tap the market for more funds, either through debt
or equity, as it ramps up an expansion in California that has
jacked up its debt levels.

Through a website linked to the Seeking Alpha account,
Reuters emailed New York-based writer Ralph Baker, who called
back and said he wrote the post. Baker said he has a short
options position worth a few thousand dollars and has worked in
the mergers and acquisitions sector. A short position makes
money if a stock falls.

Baker said that since 2008 he has been writing and running a
youth program that teaches basketball and investment skills. He
posts regularly at Seeking Alpha.

"I've written several articles on Molycorp, and never moved
the stock," he said. "I just put it all in one place, so people
can connect the dots."

Baker's article summarized the company's recent losses,
quotes from a credit downgrade, and argued it may need to write
down goodwill when it next reports earnings.

Luisa Moreno, an analyst at Euro Pacific Canada, said the
Seeking Alpha blog post was the only development she was aware
of Wednesday morning, and noted the uncertainty around
Molycorp's future financing.

"We're not sure whether it's going to be debt or equity. If
they raise significant amounts of equity, where the stock is
right now, that could lead to major dilution, potentially," she
said.
Continued...